By: Gustav Gulmert

According to the Environmental Working Group, over fifty percent of Americans consider their tap water as unsafe.[1]Instead, people turn to water pitcher filters for their drinking water at home, the gym, and work.[2] Zero Technologies, LLC (“Zero”) and Brita sell high-performance gravity-fed water pitcher filters approved by the NSF Foundation, a standards-setting organization (“SSO”) for certifying water filtration products.[3] Standards-setting organizations (“SSOs”) are groups of employees from competitors in a specific goods or service industry who meet to adopt uniform technical standards for the benefit of consumers.[4] For example, some states, including California and Iowa, require the NSF Foundation’s certification for the sale of certain products and require certification in compliance with Federal Trade Commission advertising rules.[5] On October 6, 2022, Zero sued Brita and its parent company, the Clorox Company, for undertaking a “patent ambush” in violation of federal and state antitrust, competition, and contract laws.[6]

            A patent ambush occurs when a company participates in an SSO’s adoption of new standards while failing to disclose the company holds or is developing a patent, often called a “standard essential patent,” for the technology required to abide by the SSO’s new standard.[7] While the new standard becomes ubiquitous for consumers, patent ambushers watch their competitors spend money, resources, and time adjusting their manufacturing to conform to it.[8]Immediately before the competitor’s products become profitable, the patent ambushers will assert their intellectual property rights to prevent competitors from using the technology required to meet the SSO standards, request their rivals pay costly licensing fees to use the patented technology, and effectively monopolize the market.[9] In 2007, the Third Circuit held patent ambushes are actionable anticompetitive conduct under the Sherman Act.[10]

            In 2004, Brita participated in the NSF Foundation’s task force to create a new set of standards called the NSF/ANSI 53.[11]  NSF adopted the NSF/ANSI 53 standards in February 2007, and Brita filed a patent for a “Gravity Flow Filter” that incorporated NSF/ANSI 53 with protected technology allegedly essential to meet the new standards.[12]In 2021, Brita sued Zero for patent infringement in Delaware and filed a complaint with the United States International Trade Commission to prohibit Zero or other competitors from selling products allegedly infringing on their “Gravity Flow Filter” patent.[13] The duration of nine years between Brita obtaining the patent and Brita’s suit raises questions about whether Brita is facilitating a patent ambush.[14] Brita argues it did not need to disclose the patent under NSF rules, and it only discovered Zero sold similar gravity-fed water filters until 2021.[15] On January 30th, the Eastern District of Pennsylvania federal court ruled against Brita and Clorox’s motion to dismiss, so this dispute will likely go to trial.[16]

            If Brita wins, SSOs of similar products may need to strengthen their penalties or requirements for disclosure of intent or progress towards standard-abiding patents for businesses collaborating on new standards.[17] Patent ambushes work by creating certification requirements that only one type of patentable technology can achieve or maintain, so other SSOs need to keep the availability of different avenues to reach technical standards in mind.[18] However, a win for Zero would benefit competitive and fair market practices, technical innovation, and the motivations for patent protection beyond the water filter field.

            Businesses would need to adapt their research, development practices, and surveillance of similar products to avoid delaying infringement suits until their protected IP becomes the industry standard of their competitors.[19]Companies participating in SSOs will more likely disclose potential standard essential patents and charge fair licensing fees in the future due to the patents’ boosted value.[20] Standard essential patent owners will have to set their licensing prices low enough to fall below the costs of industry members to create a new standard or research their own technology abiding by the SSO requirement.[21] The punishment of patent ambushers will keep the technology behind SSO standards accessible and affordable for all industry participants, so even the cheapest alternative is publicly perceived as safe to use.

[1] EWG Finds Over Half of People Surveyed Think Tap Water is Unsafe, Earth Water Grp. (May 17, 2022), https://www.ewg.org/news-insights/news-release/2022/05/ewg-finds-over-half-people-surveyed-think-tap-water-unsafe.

[2] Roxanna Barnaby et al., Effectiveness of Table Top Water Pitcher Filters to Remove Arsenic From Drinking Water, 158 Env’t Rsch. 610, 614 (2017) (describing the advantages and disadvantages of use of inexpensive, commercially available water pitcher filters).

[3] Henrik Nilsson, Clorox, Brita Can’t beat Filter ‘Patent Ambush’ Antitrust Suit, Law360 (Jan. 30, 2024, 10:43 PM), https://www.law360.com/competition/articles/1791990/clorox-brita-can-t-beat-filter-patent-ambush-antitrust-suit.

[4] Zero Techns. LLC, v. Clorox Co., No. CV 22-3989, 2024 WL 343169, at *3 (E.D. Pa. Jan. 30, 2024).

[5] Id. at *5.

[6] Id. at *1 (highlighting Zero’s claim that Brita seeks to “unlawfully acquire a monopoly and either Force Zero Water and other competitors out of business or pay Brita exorbitant licensing fees.”).

[7] Id. at *2.; see Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 310 (3d Cir. 2007) (arguing standard-setting process should not be biased by the financial incentive of members to curtail product competition).

[8] Zero Techns. LLC, v. Clorox Co., No. CV 22-3989, 2024 WL 343169, at *3.

[9] Id.

[10] Broadcom Corp. v. Qualcomm Inc., 501 F.3d at 314 (holding the deceptive act of patent owners do not to follow fair and reasonable licensing fees for standard essential patents is actionable).

[11] Zero Techns. LLC, 2024 WL 343169, at *3.

[12] Id. at 3-4; U.S. Patent No. 8,167,141 (filed Sept. 9, 2008).

[13] See Complaint at 1, Brita LP v. Zero Techns., LLC, 1:21-cv-01801 (D. Del. Dec. 23, 2021); In the Matter of Certain High-Performance Gravity-Fed Water Filters and Products Containing the Same, USITC Inv. No. 337-TA-1294.

[14] Zero Techns. LLC, v. Clorox Co., No. CV 22-3989, 2024 WL 343169, at *4.

[15] Id. at *4, *16 (recognizing Brita believes Zero’s suit should be dismissed or transferred due to similar arguments in their Delaware patent infringement suit).

[16] Id. at *23

[17] Jonathan Hillel, Standards x Patents Divided by Antitrust = Infinity: The Inadequacy of Antitrust to Address Patent Ambush, 9 Duke L. & Tech. Rev., at ¶9 (2010) (overviewing that SSOs often require patent holders to disclose their rights before standardization and agree to license their rights to standard essential patents after standardization at reasonable and nondiscriminatory rates).

[18] Broadcom Corp. v. Qualcomm Inc., 501 F.3d 297, 314 (recognizing when a patented technology is incorporated in a standard, the alternatives are eliminated).

[19] M. Sean Royall et al., Deterring “Patent Ambush” in Standard Setting: Lessons from Rambus and Qualcomm, 23 Antitrust 34, 36 (2009) (finding a company can relinquish its rights to enforce a patent or act so inconsistent with the intent to enforce a patent by delaying their claim).

[20] Rudi Bekkers et al., Disclosure Rules and Declared Essential Patents, 52 Rsch. Pol’y 1, 12 (2023) (showing disclosure of patent with SSOs likely help boost the patent value).

[21] Brian Dean Abramson, The Patent Ambush: Misuse or Caveat Emptor, 51 Idea: Intell. Prop. L. Rev. 71, 81 (2011).